Facts

Parties:

  • Appellant: [A.] Company (formerly [C.] Company), represented by attorney Mariella Orelli and attorney Okan Uzun
  • Respondent: [B. AG] , represented by attorney Dr. Laurent Killias and attorney Dr. Christine Möhler

Facts:

The legal dispute concerns a tourism project in the West Bank, specifically the construction and operation of a hotel and casino in the city of [W.] . The contracts underlying the project were signed by the plaintiff, the defendant, the Palestinian Authority, and two other contracting parties. The main contract (General Agreement) contains an arbitration clause in favor of an arbitral tribunal seated in Zurich as well as a choice of law clause in favor of Swiss law.

The casino "[X.] " was successfully operated from 1998 to 2000 but had to be closed due to the second intifada and subsequent travel restrictions for Israeli citizens. The defendant demanded the extension of the casino license from the Palestinian Authority, which was refused.

In December 2000, two further agreements were signed, which, inter alia, provided for the extension of the casino license and the right of use for the land area used for the tourism project.

The appellant demanded payment of outstanding rental fees of USD 100'000.-- per month from the respondent since 13 September 2013, which the respondent disputed.

Arbitration proceedings:

The appellant initiated arbitration proceedings against the respondent, in which it applied for payment of the outstanding rental fees as well as costs and compensation. The respondent opposed the claim and filed a counterclaim.

The arbitral tribunal decided with an arbitral award of 8 September 2022 that the respondent must pay the requested rental fees to the appellant, but the respondent's counterclaim was dismissed.

Appeal:

The appellant applied for the annulment of the dispositiv clauses 7 and 8 of the arbitral award and the remittal of the case to the arbitral tribunal for re-evaluation.

Considerations

The Federal Supreme Court first examined the admissibility of the appeal and found that it is admissible under the conditions of Arts. 190-192 PILA. The appeal is fundamentally of a purely cassatory nature and can only lead to the annulment of the challenged decision.

The appellant complained of a violation of the procedural ordre public (Art. 190 para. 2 lit. e PILA) as well as the right to be heard (Art. 190 para. 2 lit. d PILA). The Federal Supreme Court found that the ordre public has both a material and a procedural content and that a violation exists if fundamental principles of procedure are not observed.

The arbitral tribunal had disregarded the material res judicata of the First Arbitral Award by not considering the requirement of identity of the subject matter of the dispute to be fulfilled. The Federal Supreme Court confirmed this view and found that the claim for the issuance of a casino license, which was dismissed…